Cellnex pulls bid for Deutsche Telekom’s Towers

Spain’s Cellnex announced on Wednesday that it was dropping its $18bn offer for a stake in Deutsche Telekom’s towers business. This opened the door for a rival offer from a consortium led by KKR.

Strategic bidders and infrastructure investors have been vying for a stake in the masts division known as Deutsche Funkturm GmbH since the sale process began in March (DFMG). In a binding offer supported by Canada’s Brookfield Asset Management, Spain’s Cellnex offered Deutsche Telekom a small share in its company.

German Telekom is able to keep control of its towers business thanks to KKR’s competing offer, which is supported by American investment firms Global Infrastructure Partners (GIP) and Stonepeak. However, KKR gains some corporate governance power.

After the Benetton family and U.S. firm Blackstone’s 58 billion euro acquisition of Italian infrastructure company Atlantia, the transaction would rank as Germany’s largest deal this year and Europe’s second-largest.

An industrial combination was not desired because Deutsche Telekom sought to maintain some control over its towers business, according to persons familiar with the situation. Shares of Deutsche Telekom fell 1.7%, outperforming the German DAX. While Spain’s bluechip index Ibex-35 was down, Cellnex stock was up 1.7%.